The Problem?
After selling her company, Caroline feels like she has a lot of cash but is still hesitant to raise her standard of living. She knows she shouldn’t hold cash and should invest it, but isn’t sure where to start.
Caroline’s Goals
Caroline is married and has two children. She wants to buy a vacation home and is interested in venture investing as well as becoming an advisor to startups. In addition, Caroline wants to start saving for her children’s education, and her friends have told her it’s important to have insurance for her family. These tasks have been sitting on her plate for years, but she feels overwhelmed and never finds the time to do them.
How We Helped
A friend of Caroline’s suggested she speak with Keystone. Based on the information she provided, we conducted a goals and needs analysis that helped shed some light on Caroline’s unique opportunities.
| Goals and Needs Analysis | Opportunities |
|---|---|
| Company Acquisition | Stock qualified for QSBS making the first $10mn of her stock sold exempt from Federal taxation saving Caroline a material amount on taxes |
| What to do with Stock once Lockup Expires | Education on her options and tax implications, established trading plan created to reduce single stock concentration risk while abiding by the lockups and blackout periods, with the ultimate goal to reduce concentration risk |
| Family Protection | Selected guardians for her children, set up trusts to provide for children, and updated core estate documents including a will, trust, power of attorney, health care directive since her circumstances have changed since she first established them |
| Hesitant to Spend More Money or Raise Living Standard | Created a personal balance sheet and forecasted cash flows to show Caroline what would be sustainable and still conservative to give her comfortability in raising her lifestyle and living standards |
| Future Plans | Helped Caroline realize that work was optional in the near future, that she could start another business, never work again, or anything in between |
| Startup Investing | Established an asset allocation based on Caroline’s risk tolerance and return objectives, added a separate carve-out bucket specifically for venturing investing, and established a program to make venture investments |
| Feeling Overwhelmed | Delegated several personal financial tasks to a financial advisor to guide and complete items for her |
| Wealth Transfer | Incorporated tax-efficient gifting techniques to minimize taxes and maximize the amount of assets her heirs will receive |
| Interest in Philanthropy | Education on philanthropic strategies which maximize donation power and considerations on using philanthropy in the future to educate her children to be familiar with investing and care about the community |
| Education Savings for Children | Set up 529 accounts and front-loaded 5 years of contributions |
DISCLAIMER: THIS CONTENT IS PORTRAYING A HYPOTHETICAL CASE STUDY AND NOT BASED ON ACTUAL INDIVIDUAL CLIENT RESULTS.